Qualified Life Event - Divorce 4 months ago

[Guest matthewrust]

An employee was divorced back in April (4 months ago) but failed to report the life event to HR within the required timeframe (30 days). He is now bringing it to HR’s attention and wants to drop his ex spouse from some of his pre tax plans (Medical, Dental, etc.).

Technically an ex-spouse is no longer eligible to be covered on the group plan and should be dropped and offered COBRA. The carrier will likely allow the change to go back 60 days, but the question is what should be done with the employees deduction for Medical and Dental. Since the life event was not reported with the required timeframe, should the pre-tax contributions remain as-is until the next annual enrollment period even though the ex spouse will be dropped off of the coverage?

Could not find any information in the regs on this. I assume the same situation would come up if a deceased dependent wasn't reported within the required Section 125 timeframe. Thank you.

[Guest morris]

What happens with the carrier and COBRA is separate from what happens with the pre-tax deduction. In my opinion, the employee is stuck with current deductions until open enrollment (or some other qualifying event).

[FormsRstillmylife]

The change in carrier charge could be recognized for the prospective months.

[Guest morris]

The carrier's cost didn't change until the employee decided to drop the ex-spouse--too late.